Sunday Reader Question: What credit card should I be using for everyday purchases?

As a credit card churner, I spend a lot of timing thinking about which credit cards to get for their sign-up bonuses. However, I don’t put too much thought into which credit card to use for day-to-day purchases. I spend maybe $10,000-$15,000 dollars a year, and don’t manufacture spend too often anymore. Therefore, it has always seemed a little trivial which credit card to use for everyday purchases. For foreign purchases, I use the Chase Amazon Visa (no foreign exchange fees), and I usually use the AMEX SPG credit card for day-to-day purchases, or the MBNA Alaska credit card for places that don’t take AMEX. I’ve rethought how I should manage my credit portfolio…

The AMEX SPG [this is a referral] credit card has pretty great sign-up bonus (20,000 SPG points). It gives one SPG point per dollar spent. If you transfer 20,000 SPG points to a frequent flyer program, you get 25,000 points, so virtually, the card is a 1.25/1$ credit card. It has OK warranty and travel insurance benefits, and an annual $120 fee. That fee is easily reduced by calling AMEX and asking for an incentive – last year they mailed me a substantial AMEX gift card, and this year they deposited an extra 5,000 SPG points. 

The MBNA Alaska [this is not a referral] credit card gives me one Alaska point per dollar. It has no warranty or notable insurance offerings. It’s really a churning card, however, I’ve use it to build up a good reputation with MBNA for future churns. Although it’s an excellent churning card, it’s not great for day-to-day spending. 

So what is the best day-to-day credit card? The ideal card is one that you don’t have to think about too much, and something you’re happy to keep for many years (i.e., not a churning card). This is to maintain the benefit of credit card warranty/insurance programs, and to help build a positive credit history.

My favourite card that I can’t get is the Diner’s Club Mastercard (BMO), which has 1.7% return if the points are redeemed for cash, or excellent conversions to a number of points program. It also has a low annual fee. Further, it has excellent lounge and insurance benefits. Unfortunately, they’re not currently accepting applications, but when I called, they told me they expect to accept new applications by the end of the calendar year. 

Another card that I don’t have but am looking at is the AMEX Blue Sky [this is not a referral], which doesn’t have an annual fee, a 10,000 point sign-up bonus ($100), and 1.25 points per dollar spent. It doesn’t have great insurance or warranty benefits, but it offers a good return for no annual fee. As it’s an AMEX card, so you might want to have another card (Mastercard or Visa) for those places that don’t accept AMEX. 

Lastly, another card I don’t have but am looking at getting: the Capital One IHG Mastercard [this is not a referral]. It has an excellent 60,000 point sign-up bonus, 2 points per dollar on purchases (you only need 5,000 points for Pointsbreak redemptions), additional benefits with IHG, and excellent warranty and insurance services. It has a $120 annual fee. 

Anybody else have any other recommendations? If you’re looking for cash-back or are running a business, I’d definitely recommend different cards, but these are some really good cards for day-to-day spending. 

Comments

  1. Did you say that you can ask CC companies for incentives?

    Any experience with cards from the big banks? Things like TD Aeroplan – $400 is a stupid price to pay for a card…

    • No experience with TD (stupid card). I have had experience with Capital One and AMEX. They’re pretty good w/ customer retention bonuses.

  2. My oldest credit card is the MBNA Smartcash MC. 1% cash back and no annual fee, and it’s accepted everywhere. Good card to keep forever.
    I use my SPG card when amex is accepted and TD aeroplan otherwise. When I cancel the TD card I’ll go back to my mbna.
    Like you said, unless you spend a lot it’s not really worth worrying about. Why waste a credit hit on a card with no signup bonus? Unless a cash back card will give you $200+ worth of value it’s not worth applying for.

  3. BMO Rewards World Elite. $300 in ‘travel rewards money’ after first transaction. $0.02 per $1 in ‘travel rewards money’ for every dollar spent. No blackout dates, etc. Also has Priority Pass membership with 4 lounge passes, great insurance benefits. Was first year’s annual fee waived till a few weeks ago, but maybe it’s still free.

  4. If you have a citi card already they will convert it to the Double Cash card – no fee; 2c cash back
    No credit pull.
    BEST card hands down for everyday spend with no worries about categories and changes monthly.

  5. @ffi
    I’m confused by your advice. This blog is targeted at Canadian residents with Canadian credit. Is your advice about the Citi card relevant?

  6. RBC avion! with the twice yearly British Air promotion, it’s easy to collect avios with everyday spending and it makes sense to use it daily because the minimum transfer is 10000 rbc rewards. The yearly fee is a concern but, even if you do nothing else with them, just avios redeemed on AA flights are worth the 120$ a year.

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